J.C. Penney brings back free haircuts for kids

NEW YORK -- Children who missed the opportunity to get a free haircut at J.C. Penney last month will get plenty more chances.

After an overwhelming response to the chain's free haircut program offer for children in August --1.6 million haircuts, to be exact -- Penney will be making it a permanent offer every Sunday, starting Nov. 4.

The decision underscores the extent of new CEO Ron Johnson's efforts to re-energize the chain and transform every aspect of its business, from pricing to creating a new shopping experience.

The move comes as the Plano, Tex.-based company grapples with two straight quarters of losses and severe sales drops as shoppers, accustomed to big sales signs, have been turned off by a new pricing plan. The pricing strategy, implemented Feb. 1, involves eliminating hundreds of sales events in favor of every day prices that are 40 percent lower than last year. Starting last month, Penney tweaked its strategy to add more clearance events and to educate shoppers that they're getting a fair price every time they visit the store. At the same time, Penney is opening new shops and plans to open an area in the store that will serve as meeting places for shoppers.

Penney officials told investors in recent weeks that they've been encouraged by customers' response to the launch of the first group of new branded shops and the recent changes to its pricing strategy. And the free haircut program for children, from kindergarten through the sixth grade, also helped to bring in new customers and existing ones who didn't know about the latest merchandise changes. While Penney is still dissecting shopping patterns among families who took advantage of the free haircuts, the company believes some of them did cross the aisle to buy products.

"It definitely drove new people and reintroduced J.C. Penney to existing customers" who didn't know about the latest changes, said Jan Hodges, senior vice president of Penney's salon services, which are offered in 949 of its 1,100 stores. Penney originally thought it would give one million haircuts last month. The hairstylists earn hourly wages and are no longer paid on commission, so they were being paid anyway. Also, Hodges says it was a big win for the salons, which benefited from the boost in traffic.

Hodges added that the free haircuts also fit into Penney's mission of helping people live better. "We served a lot of different types of families," she said. She noted that the program did "help to stretch families' budgets."

As part of that overall mission, Penney will also be offering free haircuts to breast cancer survivors in October, which is breast cancer awareness month, Hodges said.

Johnson is expected to announce the free haircut program for children in a newsletter emailed to 15 million customers early Monday.

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